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Startups: How to Shrink Your IT Budget

Guest Blogger

Small businesses are continuing to spend more and more on IT. In the second half of 2012, the average IT spend for small businesses was $162,000, and in the first half of 2013, that number jumped to $192,000. That’s a 19% increase over an incredibly short time period.

The largest portion of IT expenditures, 39%, comes from hardware. Software comes in as the next highest expense at 30% of the total IT budget. IT services accounts for 19% while cloud services takes 12% of the budget.

What You Can Do to Cut IT Costs

Fortunately, there are a number of things you can do to make your IT budget stretch further. Here are a few:

Using virtualization—You can significantly cut your hardware costs by condensing server usage from multiple servers onto one physical server using virtualization. This is possible because virtualized servers allow for different environments to run on the same physical server. The cost savings extends beyond hardware as it also requires less space and energy to operate your system.

Take advantage of the cloud—Utilizing cloud services allows you to much more easily scale demand to fit business needs and further eliminates physical machines. You are also in a much better position for disaster recovery.

Automating your systems—By automating responses to events you free up IT staff and reduce the likelihood of errors. This lets everything run smoother with decreased spend on IT service, especially by decreasing the need for overtime.

Upgrading your hardware—The right hardware upgrades can prevent the need for completely new equipment. New processors like Intel®’s latest Xeon® processors can increase performance dramatically while also decreasing idle power consumption by two-thirds.

Consolidating your hardware—Here again, new technology like Dell’s PowerEdge VRTX server allows you to save money by operating more efficiently. This integrated solution fits seamlessly into existing infrastructure and allows you greater flexibility.

Making the Tech Investment

Even though many of these measures require an upfront cost, over time, you’ll see significant cost savings and a healthier IT infrastructure with greater capability and flexibility.

What are your tips for saving money on IT expenses? Share in the comments below.


Matt Smith works for Dell and enjoys learning and writing about technology. When not working, he enjoys entrepreneurship, being with his family, and the outdoors.